India’s auto retail sales saw a modest rise of 2.95% in April 2025, reaching 22,87,952 units, up from 22,22,463 units in April 2024, according to data released by the Federation of Automotive Dealers Associations (FADA).
The uptick in sales was largely driven by festive-season demand, with consumer purchases aligned with Chaitra Navratri, Akshay Tritiya, Baisakhi, Bengali New Year, and Vishu.
While most vehicle segments recorded growth, commercial vehicles saw a slight dip in performance.
Commenting on the trends, FADA President C S Vigneshwar said, “With the tariff war on hold and stock markets rebounding sharply, investor confidence improved. This encouraged customers to make purchases during key festivals, allowing April to close on a positive note.”
Two-Wheeler Sales:
Retail sales in the two-wheeler segment rose to 16,86,774 units in April 2025, up from 16,49,591 units a year earlier—reflecting a 2.25% year-on-year (YoY) growth and an 11.84% month-on-month (MoM) increase. The segment continued its resilient up-cycle, indicating steady demand despite mixed macroeconomic headwinds.
Dealers reported strong enquiry levels from rural markets, buoyed by the post-Rabi harvest season, robust crop yields, adequate reservoir levels, and a favourable monsoon outlook. Rural sales were further supported by the ongoing wedding season. In urban markets, demand remained firm, aided by the launch of new models. However, isolated challenges persisted due to high financing costs and price adjustments related to OBD2B compliance.
Passenger Vehicle Sales:
The passenger vehicle (PV) segment recorded a subdued 1.55% YoY growth, with April sales reaching 3,49,939 units—slightly up from 3,44,594 units in April 2024. On a monthly basis, however, PV sales saw a minor dip of 0.19%, pointing to stable but plateauing demand in the segment.
Passenger Vehicle Market Dynamics:
The muted growth in passenger vehicle sales reflects a market influenced by discount-driven strategies and elevated inventory levels—currently estimated at around a 50-day supply. Cautious consumer sentiment continued to limit enquiry-to-sale conversions. While robust demand for SUVs supported overall volumes, the entry-level segment remained sluggish, highlighting the need for OEMs to reassess production levels and bring down dealership stocks. This would help reduce reliance on discounts and lower inventory carrying costs. FADA reiterated its recommendation for maintaining a 21-day inventory benchmark to improve market agility and operational efficiency.
Commercial Vehicles:
Retail sales of commercial vehicles declined by 1.05% year-on-year in April, totaling 90,558 units, down from 91,516 units in the same month last year. The segment continues to face pressure from uneven infrastructure demand and financing challenges.
Tractors:
In contrast, tractor sales posted a healthy 7.56% year-on-year growth, reaching 60,915 units in April 2025, compared to 56,635 units in April 2024. The uptick was driven by strong agricultural output, favourable weather forecasts, and optimistic rural sentiment.
Three-Wheelers:
The three-wheeler segment saw the highest growth among categories, surging by 24.51% year-on-year. Sales rose to 99,766 units in April, up from 80,127 units in the same period last year, supported by increased urban mobility demand and a gradual recovery in last-mile transportation.
May outlook: The industry body provided a mixed outlook for May. The association anticipates that passenger vehicle retail sales will remain steady but muted. This is attributed to buyers awaiting new model releases and dealing with high financing costs.
In two-wheelers, FADA said, “Marriage-season and post-harvest demand should underpin enquiries, yet financiers are tightening customer-level credit criteria — higher CIBIL requirements and downpayment mandates — despite broader banking-system liquidity. Summer heat and school holidays may further suppress showroom visits though IMD predicts that it may not be as bad as last year.”
The outlook for commercial vehicles is less optimistic, as FADA expects the segment to trade flat. This is due to a high base effect, slower e-commerce activity, and increased competition from electric three-wheelers. However, targeted OEM incentive schemes and upcoming infrastructure projects may provide some offset.
